CA20N XD78 1960 A1 C.2 ONTARIO FINAL REPORT ^' -:■::- OP^:^:':-:-^^^^ THE SELECT COMMITTEE ON CROP INSURANCE mm km WM» A. STEWART, CHAIRMAN iiiiia| ill \^m$mmi A 1 7 . 1> ■5 ■••\\\ .^ .:,v^.\ 4Zi>4/-.%<?|i5 iilE Select xoMMinEfE CRtrlR/lMiSUPAHCiE 1962 ^m ifi 'iy- \ >■■''''' t*t3'rM4*n "' \£:u<>:£ c ^1 FINAL REPORT of THE SELECT COMMITTEE on CROP INSURANCE 1962 WM. A. STEWART, M.P.P., Chairman. MEMBERS OF THE SELECT COMMITTEE ON CROP INSURANCE HON. WILLIAM A. STEWART, Chairman Middlesex North RHEAL BELISLE Nickel Belt RAY C. EDWARDS ., Wentworth R. V. GISBORN Wentworth East STANLEY L. HALL Halton J. MAURICE HAMILTON Renfrew North W. ERSKINE JOHNSTON Carleton PETER MANLEY Stormont RON K. McNEIL Elgin CLARKE T. ROLLINS Hastings East JOHN P. SPENCE Kent East A. ALEXANDER MACKENZIE York North G. R. BAGG Secretary to the Committee Appointed — April 12, 1960. Re-appointed — March 23, 1961. Report Dated — February 12, 1962. — 2 — TABLE OF CONTENTS Page LETTER OF TRANSMITTAL 4 RECORD OF ACTIVITIES - 6 SUMMARY OF INVESTIGATION 8 FINAL OBSERVATIONS 9 RECOMMENDATION 10 TABLES: Appendix '*A" — Interim Report of the Committee dated January 1961 and presented March 23rd, 1961 11 Appendix "B" — List of Witnesses - - 35 Appendix ''C" — List of Contacts 36 Table ''D" — Ontario Field Crops 37 Table "E" — Tobacco Hail Rates in Ontario 39 Table 'T" — Tobacco Hail Rates, continued 40 Table ''G" — Crop Insurance in Ohio, U.S.A. 41 Table "H" — Crop Insurance 10 Year History, U.S.A. - - - 42 Table '1" — Crop Insurance Ontario - 1959 43 Table ''J" — Crop Losses in Dover & Chatham, 1960 - - - 44 Table ''K" — B.C. Fruit Growers' Premium & Losses - - - 46 Table "L" — B.C. Fruit Growers' Mutual Hail Insurance Company Balance Sheet 47 Table "M" — B.C. Fruit Growers' Mutual Hail Insurance Company Statement, December 31st, 1959 - - 48 3 — LETTER OF TRANSMITTAL TO THE HONOURABLE THE LEGISLATIVE ASSEMBLY OF THE PROVINCE OF ONTARIO. HONOURABLE MEMBERS: The Select Committee on Crop Insurance was appointed on April 12, I960, by the Legislative Assembly of Ontario, "to enquire into all mat- ters relating to insurance of Agricultural crops produced in Ontario against hazards to those crops during the growing season" and without limiting the generality of the foregoing to enquire into the following matters: 1. The hazards affecting each crop during the growing season, such as, hail, drought, frost, wind, excessive rainfall, flood, disease, insect pests, etc.; 2. The annual losses sustained by the producers from each hazard; 3. The insurance, if any, presently available for crop insurance in respect of each hazard; 4. The rates charged or that might be charged for insurance against any or all hazards; 5. The application of the Crop Insurance Act (Canada) to Ontario, or particular areas thereof, or in respect of particular crops or otherwise; And to make such recommendations as are deemed advisable with re- spect thereto; The Committee on Thursday, March 23rd, 1961, submitted an interim report to the Legislative Assembly in which it requested that it be re- appointed for another term to continue and complete its investigation. This request was granted. This Committee having now completed its assignment respectfully submits the unanimous report which follows: SIGNED: William A. Stewart - Chairman Rhcal Belisla Stani^L. Hall Maurice Hamilton Ray C. Edwards R. K. McNeil W. Erskine Johnston / / C. T. Rollins A. A. Mackenzie ^ P«t«'' Manley ^ Dated at Toronto, this 12th day of February, 1962. RECORD OF ACTIVITIES Subsequent to its reappointment in January 1961, the Committee held a meeting to determine the direction of its further investigations. After some discussion it was agreed that several meetings should be held throughout rural Ontario including the eastern and northern sec- tions in order that the farmers of those areas might have an opportunity to express their opinions on Crop Insurance to the Committee. Meetings v^ere accordingly arranged and held in Belleville, Kempt- ville. New Liskeard and Markdale. These meetings were advertised in th local press and on the local radio and all farmers in the area were invited to attend. In addition, personal invitations to attend were for- warded to officers of local Federation of Agriculture, Farmers' Union, Soil and Crop Improvement Association, and Junior Farmer organizations of the counties in the area in which each meeting was being held. On October 17, 1961, a meeting was held in Belleville and 10 farmers were present. Considerable discussion took place and Mr. Clarence Graham representing the Ontario Farmers' Union presented a short brief to the Committee. It was agreed by the Committee and those who were present that the limited attendance at the meeing was an indication of the lack of interest by farmers of the area in Crop Insurance. On October 18, 1961, a meeting to cover the eastern Ontario area was held at Kemptville, Ontario and 12 farmers were in attendance. After considerable discussion it appeared that most of the farmers of the area practiced mixed farming and were not dependent upon one or two crops for a major part of their income. It also was established that there had not been a serious crop failure in the area for many years. For this reason it appeared to be doubtful if many farmers would purchase crop insurance if it were made available by a govern- ment agency. On October 27, 1961, an open meeting of the committee was held at Markdale, Ontario, and only 5 farmers were present. The discussion that followed established that there was very little interest in crop insur- — 6 — ance shown by farmers of that area. It was, however, requested that the government should consider establishing an emergency fund that would be available to assist individual farmers or farmers of a speci- fied area who suffered a disaster that resulted in a complete loss of their crops. On October 31, 1961, a meeting was held at New Liskeard, Ontario with approximately 15 farmers in attendance. Mr. Robert Rice, a farmer, presented a brief to the Committee on behalf of those present. This brief stated that crop failures were very seldom experienced by the farmers of that area as the majority of them practised mixed farming, and expressed the opinion that few would make use of Crop Insurance if it were made available in the district. The brief further stated that these farmers supported the principle of a government sponsored Crop Insurance Plan for those farmers of Western Canada and cash crop areas in Eastern Canada whose income was dependent upon crops alone but they did not feel that it would apply in the mixed farming areas of Ontario. ^ 7 SUMMARY OF INVESTIGATION The terms of reference items 1 and 2 instructed the Committee to enquire into the hazards affecting agricultural crops in Ontario dur- ing the growing season and the annual losses sustained by the producers from each hazard. Several farm organizations including the Federation of Agriculture for Ontario and the Statistics Division of the Farm Eco- nomics and Statistics Branch of the Ontario Department of Agriculture were contacted and requested to provide information regarding the annual losses that have been sustained in past years by the producers of agricultural crops in Ontario from each individual hazard. None of these sources was able to provide this information and the Committee is satisfied that it is not possible to obtain it at this time. The terms of reference items 3 and 4 required the Committee to investigate the insurance presently available for agricultural crops in Ontario and the rates that are charged or might be charged for insurance against any or all hazards. This information is recorded in Table "E" and Table "F" of this report and further references to it are contained throughout the interim report. The application of the Crop Insurance Act (Canada) to Ontario or particular areas thereof is dealt with in the final paragraph on page 34 of the Interim Report and is also covered in several observations recorded elsew^here in this report. ^ S FINAL OBSERVATIONS (1) A large majority of Ontario farmers practice mixed farming, grow several crops and raise or finish livestock from which they receive diversified income. For this reason they are not dependent on the income from a single crop and it is doubtful if a significant number of them would purchase the Crop Insurance that could be made avail- able to them under the Federal Act Bill C-66. (2) Farmers in Ontario who grow cash crops such as fruit, tobacco, beans, etc., are interested in Crop Insurance but only in Crop Insurance that provides "spot loss" coverage. This type of insurance cannot be provided by a province operating under the provisions of the Federal Bill C-66 but is now offered to Ontario farmers by private insurance companies. (3) On several occasions it was suggested to the Committee that an emergency fund should be established to assist individual farmers or farmers of a specified area who suffered a disaster to crops. It is, however, noted by the Committee that in the past when a disaster of major importance struck an area in Ontario and a serious crop loss was sustained that the Ontario government had usually provided assistance to the farmers of that area by the method of establishing a reUef fund by matching dollar for dollar with the county involved. ^ 9 — RECOMMENDATION In accordance with the terms of reference this Committee unanimously recommends that the Ontario Legislature take no action at the present time to establish a government agency to administer Crop Insurance in Ontario. — 10 — INTERIM REPORT of ONTARIO SELECT COMMITTEE on CROP INSURANCE March 23, 1961. 11 TO THE HONOURABLE THE LEGISLATIVE ASSEMBLY OF THE PROVINCE OF ONTARIO. HONOURABLE MEMBERS: On April 12th, 1960, the Legislative Assembly of Ontario appointed a Select Committee "to enquire into all matters relating to insurance of agricultural crops produced in Ontario against hazards to those crops during the growing season," and, without limiting the generality of the foregoing, to enquire into the following matters: 1. The hazards affecting each crop during the growing season, such as, hail, drought, frost, wind, excessive rainfall, flood, disease, insect pests, etc.; 2. The annual losses sustained by the producers from each hazard; 3. The insurance, if any, presently available for crop insurance in respect of each hazard; 4. The rates charged or that might be charged for insurance against any or all hazards; 5. The application of the Crop Insurance Act (Canada) to Ontario, or particular areas thereof, or in respect of particular crops or otherwise; — 12 — And to make such recommendations as are deemed advisable with respect thereto; This Committee has not yet completed its assignment, but hereby sub- mits an interim report and begs leave to be reconstituted for another term: SIGNED: WM. A. STEWART, Chairman RHEAL BELISLE STANLEY L. HALL MAURICE HAMILTON RAY C. EDWARDS JOHN P. SPENCE REG. GISBORN W. ERSKINE JOHNSTON R. K. McNeil C. T. ROLLINS A. A. MACKENZIE PETER MANLEY 13 TABLE OF CONTENTS Page FOREWORD 15 ACKNOWLEDGEMENTS - - 19 RECORD OF ACTIVITIES 21 GENERAL OBSERVATIONS AND CONCLUSIONS ... - 29 TABLES: Appendix ''B" — List of Witnesses - - 35 Appendix "C" — List of Contacts 36 Table "D" — Ontario Field Crops ------- 37 Table "E" — Tobacco Hail Rates in Ontario 39 Table "F" — Tobacco Hail Rates, continued 40 Table "G" — Crop Insurance in Ohio, U.S.A. 41 Table "H" — Crop Insurance 10 Year History, U.S.A. - - - 42 Table "I" — Crop Insurance Ontario - 1959 43 Table "J" — Crop Losses in Dover & Chatham, 1960 - - - 44 Table "K" — B.C. Fruit Growers' Premium & Losses - - - 46 Table "L" — B.C. Fruit Growers' Mutual Hail Insurance Company Balance Sheet 47 Table "M" — B.C. Fruit Growers' Mutual Hail Insurance Company Statement, December 31st, 1959 - - 48 — 14 FOREWORD In Ontario at the present time there are approximately 120,000 farm- ers. Most of these farmers are producing crops of one kind or another which may be marketed as cash crops, or may be fed to livestock to eventually produce dairy, poultry or meat products. To produce these crops each individual farmer must contribute an actual real investment in land, labour, machinery, fertilizer, seed, etc. The amount of the in- vestment, of course, varies greatly between individual crops and to a lesser extent between individual farmers producing the same crop. The problem faced by each farmer which is a real source of worry to him is that after he has done his best, he is still at the mercy of fortune or the elements. While the risk of total or substantial crop failure is not large, and while it varies from one farming area to another, the best and the poorest cropping efforts are subject to hazards that could bring total failure. It may also be pointed out that it is not only the individual farmer who carries the risk of financial loss. Each farmer is part of a com- munity which has as its centre a town or village. Most of the business enterprises in each of these towns are mainly dependent upon the pur- chasing power of the farmers in the ara. Thus a major or minor crop failure, or even the unexpected loss of a crop, by one individual farmer, is reflected and adversely affects a business account in the local elevator, store or bank. Whenever an individual or a Corporation invests money it assumes a risk of a loss of the investment. The risk is much the same whether the investment is in a car, a building, goods to be sold, or even life. Our society has, over a period of years, developed a means of protecting those who face these common risks. This device is insurance, by which a number of individuals or companies share this risk by each contributing a levy or premium to establish a common fund, which is available to reimburse contributors in the event of misfortune or disaster. Because it is difficult to establish a sound basis for measuring the risks involved in the production of crops, and because there is always a threat that an area-wide disaster might present a serious financial drain on the resources of an individual company, private insurance companies have been somewhat slow in developing and offering a comprehensive crop insurance program to farmers. In addition, most of the insurance — 15 — offered by private insurance companies to farmers in Canada and the United States covers only the risks of hail and frost. In 1939, the government of the United States of America estabhshed a Federal Crop Insurance Corporation, an agency of the United States Department of Agriculture. This Corporation has offered to farmers a type of insurance that is not available from private insurance companies. This insurance generally, but v^ith some exceptions, covers unavoidable loss of production due to drought, excessive rain, floods, hail, wind, hurricane, tornado, frosts, freeze, winterkill, snow, lightning, fire, earth- quake, wild life, insect infestation, plant diseases and any other unavoid- able cause of loss, due to adverse weather conditions. It does not cover causes of loss due to neglect, poor farming practices or theft. It should be noted that this insurance covers loss of production only, and does not cover financial losses due to low prices. The insurance is voluntary and the farmers pay a premium for this protection. The premiums are required to be set at a level believed adequate to cover losses and to provide a reserve against unforeseen losses. Operation costs have been borne by the government in the United States of America through annual appropriations and thus costs have not been included in the premiums the farmers pay. This crop insurance program in its early years underwent consider- able difficulties and suffered heavy losses in indemnity payments. To protect itself, the Corporation sought to expand its area of coverage in order to diversify its risks, and it has cut from its program any areas of real bad risks and no longer allows farmers to wait until risk con- ditions occur before they acquire insurance. Policies have a face value ranging from 40% to 60% of the harvest the farmer would normally expect to reap. Premium rates paid range from 2c to 35c per $1.00 of coverage and are determined by past records of losses and crop damage in the Counties where the insurance is written. On June 29th, 1959, the Federal Agricultural Minister, Mr. Harkness, introduced a crop insurance plan in Canada. Because of the limitations under the British North America Act, the Government of Canada is con- stitutionally unable to provide crop insurance directly. If a Province will agree to sponsor a plan, the Federal Government has offered to pay half — 16 — of the administrative costs and to reimburse the Province with that por- tion of the farmers' premium which the Provincial Government may pay up to 20%, as set out in item 4 (1) of the Federal Crop Insur- ance Act: '4 (1) The contribution payable to a province under an agreement shall be paid in respect of each year and shall be the total of (a) fifty per cent of the expenses incurred by the province in that year in the administration of the insurance scheme; and (b) if the province has by the agreement undertaken to pay a share of the premiums, the lesser of (i) the amount required to re-imburse the province for the share of the premiums paid by it in that year, or (ii) twenty per cent of the premiums paid in respect of policies of insurance in that year." The Federal Government has also agreed to provide loans to any province faced with heavy runs on the insurance fund, as set out in item 4 (2) of the Federal Crop Insurance Act: ''(2) The loans that may be made to a province under an agree- ment shall not exceed in any year seventy-five per cent of the amount by which the indemnities required to be paid under policies of insurance exceed the aggregate of (a) the premium receipts for that year, (b) the reserve for the payment of indemnities, and (c) two hundred thousand dollars." The crop insurance that can be offered under this Federal plan must be on a ''unit" basis which means that a farmer must be prepared to insure all of the specific crop in which he has 100% interest as one unit. The amount of the insurance to be effected on that crop shall not exceed 60% of the long-term average yield of the crop in the area. This — 17 — insurance, like the Federal Crop Insurance Corporation coverage in the United States would cover all normal risks, except losses due to neglect or poor farming practices and the loss for the complete unit would have to exceed 40<^c of the long-term average production of the crop for that area before a claim would be valid. The Province of Manitoba has already moved to take advantage of the P^deral assistance and on August 4th, 1959, passed an Act to estab- lish a Crop Insurance Program in that Province. For the past year the program has been operated on a test area basis with premium rates cal- culated against the history of crop yield for each specified area. These premium rates also correspond closely to the rates set by the United States Crop Insurance Corporation for comparable areas just across the border from Manitoba. As of October 18, 1960, the harvest was almost completed in Manitoba and the Crop Insurance Agency has had a very successful year. It was reported that approximately 2,500 farmers bought insurance and there have been less than 150 claims. They do not offer an all-risk policy, but do cover risks such as drought, flood, excessive rain- fall, insect pests and disease. Although the coverage for 1960 in Manitoba was mainly for Spring Wheat the agency is now investigating and calcu- lating coverage rates for sugar beets and is considering offering insurance as a package proposition for Wheat, Oats, Barley and Flax, as well as separately by individual crops. The Province of Saskatchewan has also passed a Crop Insurance Act and may be operating in 1961. British Columbia is also investigating Crop Insurance, especially as it might apply to the fruit industry. — 18 — ACKNOWLEDGEMENTS In the course of this investigation the Committee held several meet- ings, received submissions from many delegates and organizations, and interviewed many individuals. The members of the Committee were very much impressed by the briefs presented. The Minister of Agriculture, the Honourable W. A. Goodfellow, was most gracious in providing the assistance and co-operation of his staff. The Committee is especially grateful to the Deputy Minister, Dr. C. D. Graham, who contributed sound counsel and advice, and to Dr. H. L. Patterson, Director of Farm Economics, who addressed the Committee on two separate occasions, and was also the source of valuable inform- ation. A special tribute should also be given to Professor A. C. Robertson of the Ontario Agricultural College, Guelph, Ontario, who was inter- viewed by the Committee and discussed the manner that crop insurance might affect the availability of credit to Ontario farmers. Also provid- ing assistance were Mr. S. S. Symonds, the Chief Statistician, Depart- ment of Agriculture; Mr. Ken Lantz, Director of the Extension Branch; and Mr. E. A. Western, Manager of the Junior Farmer Loan Corporation. The Committee also owes a debt of gratitude to Mr. S. B. Williams, Director of Administration, Department of Agriculture, Canada. Mr. Williams travelled from Ottawa to Toronto on Sept. 19th to explain the manner in which Bill C-66, the Federal Crop Insurance Act, would apply to the Provinces, and how it might operate under Ontario conditions. The Committee travelled to the U.S.A. on two occasions. On Sept. 27th, they visited the State of Ohio and were welcomed by Mr. Earl Wilson, State Director of the Federal Crop Insurance Corporation. Mr. Wilson organized a very interesting and informative programme and provided the Committee with valuable information concerning the operation and administration of crop insurance in that State. The Com- mittee was also taken on a tour and visited many Ohio farms. In each case the owner of these farms was most courteous to the group and dis- 19 played great patience in answering the multitude of questions that were presented by members of the Committee. On October 19th the members of the Committee travelled to East Lansing, Michigan, and were received by the Michigan State Agricultural College, represented by Dr. N. P. Ralston and Prof. Robert J. Bevins. They were again provided with an opportunity to visit many excellent farms and discuss the matter of crop insurance with the owners of those farms and representatives of the State Insurance Corporation. In ad- dition, the group was welcomed by Mr. R. L. Donovan, President; Mr. F. M. Hector, Secretary of the Michigan Mutual Hail Insurance Company, and Mr. Wm. McGee of the Michigan State Insurance Commission, who discussed and explained crop insurance as provided and administered by private insurance companies in the State of Michigan. Finally, the Committee would like to acknowledge the assistance of stenographers, Mrs. Teresa Walsh and Miss C. E. Taylor, who assisted at the meetings and prepared the minutes. In addition, a valuable contri- bution was provided by the Secretary, Mr. G. R. Bagg, who arranged the meetings and the Inspection Tours, organized the material that accumu- lated, and assisted in the preparation of the report. — 20 RECORD OF ACTIVITIES The Select Committee on Crop Insurance was constituted by the Ontario Legislature on April 12th, 1960, on a motion by the Honourable Leslie M. Frost, Q.C., Prime Minister of Ontario. The first meeting of the Committee was held in Toronto on June 16th, 1960, and all members were in attendance. This was mainly an organizational meeting to acquaint the members of the Committee with the problem at hand and to discuss the basis on which the Committee would operate. As a result of this meeting an advertisement, which recorded the formation of the Committee and which invited submissions on crop insurance from all interested parties, was inserted in all daily and weekly newspapers in Ontario. Letters were also sent out to all insurance companies which offered crop insurance coverage in Ontario and to all farm organizations, associations and marketing boards, which, in the opinion of the Committee, might have an interest in crop insur- ance. A complete list of these is contained in Appendix "A" and "B". Many organizations accepted the invitation, as outlined in the ad- vertisement, submitted briefs and appeared before the Committee. Let- ters and opinions were also received from individuals who could not make an appearance before the Board. Meetings to receive these dele- gates were held in Toronto on September 19th and 20th, 1960, and again on October 18th, 1960. In addition to submitting these prepared briefs the delegates who appeared at the above meetings answered many ques- tions presented by members of the Committee, and supplied helpful in- formation and opinions on the matter of crop insurance in Ontario. In order to obtain first-hand knowledge of the problem and to study the administration of an actual crop insurance agency, tha Committee on September 26th, 27th and 28th, 1960, travelled to the State of Ohio. The Committee visited the offices of the State Crop Insurance Corpor- ation and studied in detail the organization and administration of the Government sponsored Crop Insurance Plan as applied to the State of Ohio. The Committee was impressed by the high calibre of the State Corporation Officials, by their grasp of the problem involved, and the efficient manner in which the Corporation was operated. Mr. Earl Wilson, the area Director for the State of Ohio, outlined the manner in which his organization administered crop insurance in — 21 — that State. He advised that the Corporation was directed from Washing- ton and the Federal Office consisted of the National Manager, Assistant Manager and the following divisional heads: Underwriting, Administration, Budget and Finance, Sales and Service, Claims and Audit. There are four area Directors in the nation, under the supervision of the Washing- ton Office, who perform liaison duties between the field and the Head- quarters Office. There are twenty-one State Offices in the nation serving thirty-eight states. The state office includes the State Director, Office Manager and Office Staff, District Directors and Supervisors, Agents, Fieldmen and Adjusters. The State Director's duties are the over-all administration and promotion of crop insurance within his state or states. The District Director's primary duties are selecting and training field personnel, promotion of crop insurance, and public relations. Each Dis- trict Director usually has charge of ten to fourteen counties. He may have one or two Supervisors to assist with sales, service and loss adjust- ment. All employees of the Corporation, both full and part-time, are salaried. County fieldmen and adjusters are usually employed only part- time, depending upon the seasonal work load. Although agents are representatives of the Corporation, they are considered as self-employed. There are three types of agents. Regular agents are in charge of promoting, selling and servicing in the county in which they operate; they are paid a base figure per crop insured each year, plus a commission on the premium collected. Commission agents perform only sales work on a straight commission basis. Service agents perform the clerical duties of a county office, and provide an office for a contact-service point in the county; they are paid a fixed com- mission per month. Fieldmen perform sales and service work when assigned by the Distiict Director or Supervijor. Adjusters perform ad- justment work when notified by the Agent. The State Office in Columbus serves: Ohio, Indiana and Michigan. There are seven District Areas in the three States, and crop insurance is offered in eighty-three of the total of 262 counties in the three States. Following the visit to the Ohio State Office of the Federal Crop Insurance Corporation, the group travelled by bus and visited several farms in the State of Ohio. The first visit was to the farm of Mr. Paul Baughn, who appeared to be a typical farmer in Greene County, Ohio. Mr. Baughn operated a 160-acre farm and his crops for this year were: — 22 — 62 acres of grain corn, 25 acres of soybean and 20 acres of wheat. Mr. Baughn had carried insurance for the past two years. He has never had a crop loss. He commented that in his opinion the main hazards to his crops were winter kiUing of fall wheat and poor quality in soybeans. It was his opinion that crop insurance should be carried by a farmer to protect the investment in the crop and also to protect him against unexpected disaster. He felt that crop insurance would be of consider- able assistance to a young farmer becoming established on a farm, as it would help him to secure the needed credit from banks, feed and fertilizer dealers, and elevators. The group then visited Mr. Rankin MacMillan, who also operates a farm in Greene County. This year Mr. MacMillan grew 85 acres of grain corn and 27 acres of winter wheat. Mr. MacMillan insures only his wheat crop, as he did not feel it would pay him to insure his corn crop, because he usually fertilizes his corn heavily and did not feel there was much chance of his yield falling below 60% of the long-term average for the area. He stated that he would be interested in insuring his corn crop if it could be insured on a "spot loss" basis, rather than on a "unit" basis, as is required by the Federal Crop Insurance Cor- poration. Mr. MacMillan has carried insurance for approximately 20 years, and his only claim was in 1951. In his estimation, only approxi- mately 25% of the farmers in Greene County carry crop insurance of any kind, and many of these farmers, like himself, only carry insurance on one of several crops. It should be pointed out that in the United States, the acreage of wheat and tobacco grown by each individual farmer is under quota control by the Federal Department of Agriculture. The Committee also visited Mr. Edward Kaye of Highland County, Ohio; Mr. Robert Riddell of Pickaway County; Mr. Dwi:^ht Wills of Pickaway County; and Mr. Donald Schelling of Highland County. These farmers confirmed the previous opinions expressed to the Committee, and answered many questions presented by individual members of the Committee. On the evening of October 18th, the Committee travelled to Lansing, Michigan, and was received by Dr. N. P. Ralston, Director of Extension for Michigan State College, and Professor Robert J. Bevins of the Agricul- tural Economics Department. On October 19th, accompanied by Professor — 23 — Bevins the group made a tour of the State of Michigan and visited many typical Michigan farms. The first farm visited was Mr. C. Mann's in Shiawassee County. Mr. Mann last year grew 60 acres of white beans, 20 acres of winter wheat. Both crops were covered by Federal Crop Insurance. Mr. Mann stated that the reason he carried insurance was mainly to protect his investment and to have security and peace of mind. He estimated that approximately 10 years ago 4,000 farmers in his County carried Federal Crop Insurance, but now this figure had been reduced to approximately 200. He stated that in his opinion the main reason why 3,800 farmers had discontinued this insurance was that the amount of coverage per- mitted under this plan was too small. The cost of producing all crops is going up each year, and the Federal Crop Insurance Corporation's insurance coverage is not. The Committee then visited Mr. J. Baungartner, also a farmer of Shiawassee County. Mr. Baungartner grows approximately 50 acres of beans, and he does not carry crop insurance of any kind. He stated that the reason for not carrying insurance was that he operates a well-drained farm and usually produces above average crops. He very seldom has a crop failure. For these reasons he does not feel it would pay him to carry crop insurance. He felt that he would be more interested in Federal Crop insurance, if he could purchase a higher amount of cover- age. He further commented that in his opinion a farmer relying on a single crop for his income is much more likely to be interested in crop insurance to protect his investment, than a farmer who grows diversi- fied crops. The Committee also visited Mr. Cecil of Shiawassee County, Haske Brothers of Tuscola County and Mr. W. Bootlets of Tuscola County. Of these farmers who grew considerable acreages of white beans as a "cash" crop, all except Mr. Bootlets carried insurance on their crops for hail only, through the Michigan Mutual Hail Insurance Company. Their com- ment was that in a poorer farming area where crop yields are not likely to be too high, the farmers use the Federal Crop Insurance Corporation. They estimated that approximately 75% of the farmers in their County carry hail insurance through the Michigan Mutual Company. It was also their opinion that on a well-drained and well-operated farm, hail was the only significant risk that would be encountered. — 24 — On the morning of October 20th, the Committee met with Dr. Ralston and Professor Bevins, Mr. R. L. Donovan, President, and Mr. F. M. Hector, Secretary of the Michigan Mutual Hail Insurance Company. Also present was Mr. William McGee of the Michigan State Insurance Commission. Mr. Hector and Mr. Donovan both addressed the group and provided considerable information regarding the administration and operation of the Michigan Mutual Company. In general, it appeared that the Company is in a sound financial condition and is doing a very good job of providing insurance coverage at minimum cost. The Company insures 75% of the farmers in the State of Michigan; the total cover- age of crops in that State is now over $20,000,000.00 and the premium on all crops insured is $12.00 per thousand. The Company employs approximately 280 licensed part-time agents. This Company now covers only the risk of hail, as they feel it would be too risky to cover other hazards and the premium would be more than the farmers could afford to pay. This Company insures all farm crops except fruit and onions. The Company did insure fruit but discontinued last year, because the risk required that the rates be too high for the farmer to carry. Last year they charged $50.00 per thousand for fruit coverage. They stated that there are now facilities for farmers growing fruit to obtain coverage from stock companies in Chicago, but very few farmers carry this insur- ance because of the high rates. In addition to the above activities, the Committee decided to meet and interview at first-hand a cross section of Ontario farmers, including both those producing insurable cash crops and those farmers who specialize in livestock production. Accordingly, meetings were arranged at Tillson- burg on October 26th and at Ridgetown on October 27th, 1980. On October 26th the Committee travelled to Tillsonburg, and attend- ed a meeting in the Town Hall. There were approximately 40 farmers, insurance agents and reporters in attendance. The Chairman explained the terms of reference under which the Committee had been appointed by the Ontario Legislature, and then requested the Secretary to outline the activities of the Committee to date, and to explain how the Federal Bill C-66 might apply to Ontario. The meeting was then thrown open and farmers were invited to present opinions and direct questions to the Committee. — 25 — In general, useful information was exchanged between the farmers present and the members of the Committee. It appeared that the farm- ers who specialized in tobacco were reasonably satisfied with the insur- ance coverage that they are now able to obtain from private companies. In addition, most of the farmers present were unanimous in their opinion that a Government Insurance Plan that would be operated under the provisions of the Federal Bill C-6o, would not be acceptable to them. They were satisfied that the amount of insurance coverage, which may not exceed 60% of the long-term average crop production for a specified area was definitely too low. In addition, they considered that an insur- ance plan suitable for a tobacco crop should be operated on a "spot loss" claim basis rather than on a "unit" basis. It was also indicated at this meeting, that hail, and to a much lesser extent early frost, are the only serious hazards that affect a tobacco crop. It was also brought out that the average coverage on an acre of tobacco was approximately $200.00 to $300.00. The farmers agreed that the high premium rate was the reason for this limited coverage. On October 27th the Committee travelled to Ridgetown Agricul- tural School at Ridgetown. There were approxim.ately 35 farmers and a number of insurance agents from Kent and Essex Counties in attend- ance at this meeting. The Chairman explained the terms of Reference which had been laid down by the Legislative Assembly for Crop Insur- ance and stated that the Committee was not here to sell crop insurance, but was endeavouring to determine if the farm people of South Western Ontario were interested in crop insurance, especially a plan that might be sponsored by a Government Agency. Many of the farmers present directed questions to the Committee and much useful information was exchanged. One of the farmers from Essex County advised that private insurance companies now offered hail insurance coverage on all crops to farmers in his area. He estimated that these companies had this year written insurance to the amount of $250,000.00 on corn, wheat, soybeans and tomatoes. The premium rates for grain crops are approximately $1.00 per acre and on tomatoes ap- proximately $16.00 per acre, which covers the tomatoes up to $400.00 per acre. It appears that the farmers in that area are reasonably satis- fied with the present hail insurance and that about 40% of the farmers in that area now carry hail insurance. — 26 — A delegation of the Kent County Fruit Growers' Co-Operative ex- pressed the opinion that the fruit growers of that area had a large amount of capital invested in their crops. The risks of damage from hail were substantial and they were definitely interested in crop insurance. They appreciated that hail insurance on fruit crops was available to them from private companies, but they felt that the average fruit grower could not afford to carry this insurance on account of the high cost. Representatives from Kent County Vegetable Growers' Marketing Association also presented several questions to the Committee and in- dicated that many vegetable farmers would be interested in a Govern- ment sponsored insurance plan. Many of the farmers present also ex- pressed the opinion that in general they would be more interested in a crop insurance plan that would provide higher coverage than that indicated by the Federal plan and that would also insure on a "spot loss" rather than on a "Unit" coverage basis. Correspondence was exchanged between the Committee and the Secretary of the British Columbia Fruit Growers' Mutual Hail Insurance Company regarding crop insurance on tree fruits in that province. The B.C.F.G. Association numbers about 3,500 members but of this number only about 1,500 are considered to be actively producing fruit in any quantity. The above Mutual Insurance Company has 1,800 actual share- holders and has had over 1,000 policy holders in some years. It is operated on a co-operative basis with share capital subscribed by the pur- chasers of insurance and hail is the only hazard covered. During its 10 years of operation premiums have averaged approximately 5% of the risk covered and in only one year has an operating loss been re- corded. As a co-operative Company, refunds of part of the net profit have been made to policy holders during 6 of the 10 years of operation. These refunds varied from a high of 20% of the premiums to a low of 8% and they are made only on policies effective in the year of refund and on which no claim has been paid. The 1960 season has been the most successful to date and it is estimated that the refund will be shghtly in excess of 30%. — 27 — Tables "J", "K" and "L" provide detailed information on the oper- ation of this Mutual Insurance Company. Several farm organizations including the Federation of Agriculture for Ontario and the Statistics Division of the Farm Economics and Statis- tics Branch of the Ontario Department of Agriculture were contacted and requested to provide information regarding the annual losses that have been sustained in past years by the producers of agricultural crops in Ontario from each individual hazard. None of these sources was able to provide this information and the Committee is satisfied that it is not possible to obtain it at this time. — 28 — OBSERVATIONS AND CONCLUSIONS At the present time crop insurance is offered to Ontario farmers by a limited number of approximately 15 private insurance companies. The risks covered for tobacco are: hail, frost and wind. For crops other than tobacco hail is the only risk covered. Rates for crops, other than tobacco, for hail coverage only, range from $2.00 to $5.00 per $100.00 coverage. There is no ''Set" maximum for insuring those other crops, the agent being requested only to insure for not more than the potential value of the crop concerned. Tobacco may be insured against hail, frost and wind. Rates for hail coverage vary from $6.00 to $14.00 per $100.00 coverage. The rate is determined by the history of the risk involved, on the particular area which usually resembles a township in size. The rates for frost and wind coverage vary from $4.00 to $10.00 per $100.00 coverage. There must be a minimum of 10% damage to the crop in each case, before the Company is liable for any claim. Coverage is available on an open basis, and is not selective as to risk within each designated area. For hail insurance coverage on tobacco there is no maximum liability per acre, although in general practice farmers do not usually insure for more than $250.00 per acre. It is probable that the amount of the premium is the main reason for this hmited coverage, as the actual value of the tobacco crop at marketing time may range from $500.00 to $1,000.00 per acre. It is estimated that approximately 90% of the tobacco farmers carry this hail insurance. Figures taken from the annual report of the Superintendent of Insurance for the Province of Ontario in 1960 establishes that over the past 5 years, 74.3% of the net premiums collected on crop insurance by private insurance companies has been paid out in damage claims (see Appendix "H"). The balance of 25.7% is used to cover the agent's commission, provincial premium tax, administration and profit, if any. Information provided by the Secretary Treasurer of the Ontario- Quebec Hail Association indicates that the administrative costs for all Companies would average approximately 15.8%. Since the Provincial — 29 — premium tax is 2% it follows that the agent's commission must average slightly under 10%. From the above figures it would appear that insur- ance agents, or these private insurance companies did not make excessive or even substantial profit on crop insurance in Ontario during that five- year period. Crop insurance, as offered in Ontario today by private companies is on a "spot loss" basis, and if more than 10% damage from the hazards covered occurs on one acre of crop, a claim results. Crop insurance as offered by the Manitoba plan and the Federal Crop Insurance Corporation of the United States, is on a "unit" basis. Under this method all acreage of one crop in which the insured has a 100% interest, comprises one insurance unit. In general, under this method the loss must exceed 40% of the long-term average production of the whole unit, before a claim is valid. In other words, no "spot loss" claims are paid unless the total production of the whole unit has de- creased below the specified coverage. Submissions from various farmer groups have indicated that farmers, on the whole, are of the opinion that any participation in the crop insur- ance plan should be on a purely voluntary basis. It must also be individual participation and not an automatic participation by a grower group or association. The opinion was expressed several times by representatives of farm organizations that coverage for insurance purposes should be limited to natural hazards and should not cover anything over which the farmer himself has, or could have, even partial control. Many representatives of agricultural commodity groups before the Commission expressed con- cern and apprehension over the fact that under the Government sponsored plan some unscrupulous or dishonest participants might take an unfair advantage of the insurance agency and use it as a substitute for efficiency in farm practice and management. The apprehension that was expressed by some farmer groups in Ontario that an unscrupulous individual farmer might take advantage of a crop insurance plan, did not seem justified by the experience of the — 30 — Committee in Ohio. The fact that coverage was limited to 60% of the average long-term yields and the fact that the plan was administered in a very efficient manner and that the Corporation had the right to accept or reject an application for insurance seemed to preclude any one taking advantage in this way. The opinion was also expressed that under the insurance plan, even if damage to crops should appear early in the season, final settle- ment should be delayed until after harvest, as in many cases the crop makes a surprising recovery. This was demonstrated very clearly by the recovery made by some crops in Kent County, which were damaged by extensive rain in the month of June 1960, and subsequently recovered to produce satisfactory yields. It has also been established that under any plan studied, the cover- age on the crop concerned does not take effect until the day the crop is planted. One of the most serious hazards in Ontario is that the ex- cessive rainfall in the early Spring often prevents farmers from seeding a cash crop. It will be very difficult to protect them from this hazard in any insurance plan. In general, apart from the tobacco farms, Ontario farmers have not indicated that they are especially interested in all-risk crop insurance. This, in the opinion of the Committee, would also appear to be the case in the United States where although the Federal Crop Insurance Cor- poration has been operating for 20 years, only approximately 20% of the farmers in cash crop areas, visited by the Committee, participate in the Federal Insurance plan. Discussions with farmers in Ohio seemed to indicate that there was a slight adverse selection of risks operating in that State. This resulted from the reason that a good farmer who practised all up-to-date and efficient farming methods and used adequate and above the average amount of fertilizer, often felt that there was little likelihood of his crop yield falling below the 60% of the long-term average for that area. The average farmer who did not strive for higher yields was more hkely to take out crop insurance. — 31 — It appears that the "motive" which influenced most Ohio farmers to seek insurance coverage was security and protection of the income invested in the crop. Even well-to-do farmers who could afford to carry their own insurance were convinced that this was the main reason a farmer would participate in a crop insurance plan. It appears that the methods of reducing premiums, as employed by the Federal Crop Insurance Corporation in Ohio, such as "Early Pay- ment Discount" and 'Three-Years Good Experience Discount" are sound administrative practices and are instrumental in reducing overall costs. Although the Federal Crop Insurance Corporation has operated in the United States for 20 years, there is still only a very limited amount of coverage written on fruit and vegetable crops. This is in spite of the fact that several "Pilot" programs for these crops have been intro- duced in various States. For this reason, it would appear that it is extremely difficult to establish and properly administer a crop insur- ance program that would prove satisfactory to farmers growing fruit and vegetable crops. Some submissions to the Committee have suggested that insurance coverage for a crop should be based on the productive capacity of each individual farm, rather than on a local area as is now practised in Mani- toba and the United States. Evidence produced by officials in Ohio indicate that such a plan on an individual farm basis had been tried in that State and was not successful, as it did not seem possible to admin- ister it on a sound basis. Discussion with farmers in Ohio and Ontario has indicated that the existence of insurance coverage on crops and the availabality of in- surance for cash crops yet to be produced, might be an important factor in determining whether adequate credit would be made available to the farmer by a chartered bank, feed company or other credit facilities. This would apply especially to young farmers who are attempting to establish themselves on farms with limited capital available to them. It has been indicated that commercial firms, such as elevators, feed companies and banks, etc., would be pleased to see cash crop farmers — 32 — in general accept and use crop insurance as a method of stabilizing and protecting farm income and as a safe guard against unexpected crop losses. Fruit and Vegetable growers in the past have shown only slight interest in the crop insurance (hail) that has been made available to them by private companies. Most of the growers interviewed have never carried insurance and only a few have ever made concrete en- quiries. A few have taken out policies at one time or another, pri- marily against hail, but discontinued the practice either because they escaped hail and felt that the cost was too high, or because in their opinion they received too low a compensation when they did sustain a crop loss. Most fruit and vegetable growers accept the fact that over the years they are going to suffer losses of a greater or lesser degree from frost, wind, hail or other hazards. However, they anticipate that these losses usually will be to such a limited extent that they can cope with them. The diversity of crops grown by most Ontario Fruit and Vegetable grow- ers is another factor in their willingness to carry their own weather risks in the past. It would be difficult to evaluate and administer a crop insurance plan that would adequately cover the 40 different fruit and vegetable crops grown in Ontario. Much of the fruit is produced on trees, vines and canes. In some instances injury from adverse weather affects more than the current year's production. Injury to the plant itself may affect production for one or several succeeding crops, thus complicating the problems of calculating risks and making settle- ments. Growers who have had experience with crop insurance feel that the problem of reaching fair and equitable adjustments is one of the most difficult and most important aspects of a crop insurance plan. Growers of fruit and vegetable crops agree that hail, wind and unseason- able frost are the hazards that concern them most. Drought, excess rain and pests are of lesser importance. Increasing use of irrigation tends to offset the fear of drought. The risk of damage from excessive rainfall depends on surface and internal drainage of the soil and can be controlled to a certain extent by adequate tile drainage. In general, — 33 — insect pests, fungus and bacterial disease can be controlled by chemical sprays, dusts and good husbandry practices. As of this date, from representations made to the Committee, the Committee is of the opinion that crop insurance as provided under the Federal Act Bill C-66, in its present form, would not meet with general acceptance in the widely diversified conditions prevalent in the Agricul- tural industry of this Province. However, the Committee sensed, among the farmers contacted, a feeling of unwillingness to reject crop insurance because they felt there might be an element of value for credit purposes, and financial protection from hazards beyond their control, which they did not wish to forfeit. In this interim report, while general observations have been ex- pressed, the Committee does not feel that at the present time it is in a position to offer specific recommendations either for or against a Govern- ment sponsored crop insurance program. From the observations outlined it would appear that hail is the most significant hazard in the growing of cash crops in Ontario, especially Tobacco and Fruit crops. Farmers in Ontario now have an opportunity to purchase protection against the risk of hail from private insurance companies. In addition, the investigation of this Committee has estab- lished that in other areas. Mutual Hail Insurance Companies have been formed to provide a self-help program of insurance protection for mem- bers and other farmers who wished to participate. - 34 APPENDIX ''B" LIST OF WITNESSES Mr. S. B. Williams, Director of Administration, Department of Agriculture, Ottawa. Mr. J. F. Grey ) Mr. S. S. Smith ) Ontario Tobacco Growers' Marketing Board. Mr. G. C. Nichols, Ontario Seed Corn Growers' Marketing Board. Mr. Murray McPhail, Ontario Elevators Association. Mr. A. H. Martin ) Mr. Morris Darling ) Ontario Soil & Crop Improvement Association. Mr. Kenneth E. Jones, Tobacco Insurance Agents of Ontario. Mr. Ernest Sheik, Anglo Canadian Fire and Insurance. Mr. Horace Johnson, Hail Insurance Underwriters' Association. Mr. C. M. Belyea ) Mr. Chas. Huffman ) Ontario Federation of Agriculture. Dr. H. C. Patterson, Ontario Department of Agriculture. Mr. Gordon Hill, Ontario Farmers' Union. Professor A. C. Robertson, Dept. of Agricultural Economics, O.A.C., Guelph. Dr. John F. Brown, Ontario Fruit & Vegetable Growers' Association. Mr. David McLaren ) Mr. C. N. Heath ) Ontario Flue-Cured Tobacco Marketing Board. — 35 — TABLE "C" THE FOLLOWING WERE CONTACTED BY THE COMMITTEE Agents General Insurance Company, Anglo-Canada Fire & General Insurance Co., Canadian Reinsurance Company, American Insurance Company, Continental Insurance Company, Federation Insurance of Canada, Gibraltar Insurance Company, Global General Insurance Company, Guarantee Co. of North America, Home Insurance Company, Niagara Fire Insurance Company, Phoenix of Hartford, Reliance of Canada, Simcoe & General Insurance Company, Tobacco Insurance Agents of Ontario, Ontario Asparagus Growers' Marketing Board, Ontario Bean Growers' Marketing Board, Ontario Berry Growers' Marketing Board, Ontario Grape Growers' Marketing Board, Ontario Tender Fruit Growers' Marketing Board, Ontario Fruit-for-Processing Co-Operative Limited, Ontario Seed Corn Growers' Marketing Board, Ontario Soya Bean Growers' Marketing Board, Ontario Sugar-Beet Growers' Marketing Board, Ontario Vegetable Growers' Marketing Board, Ontario Fresh-Peach Growers' Marketing Board, Ontario Flue-Cured Tobacco Growers' Marketing Board, Ontario Wheat Producers' Marketing Board, Ontario Farmers' Union, Ontario Federation of Agriculture Ontario Soil & Crop Improvement Association, Ontario Potato Growers' Association. — 36 — TABLE "D" ONTARIO PRODUCTION AND VALUE OF FIELD CROPS FOR YEARS 1958 AND 1959 Yield Total Price Total Crop Year Acres Per Acre Production Per Unit Farm Value 1 iushels Bushels $ c $ Winter Wheat 1958 1959 580,000 425,000 41.2 29.3 23,896,000 12,464,200 1.32 1.56 31,542,300 19,383,100 Spring Wheat 1958 1959 15,000 17,300 24.2 23.3 363,000 403,000 1.38 1.34 501,000 539,600 Oats for grain & cut green 1958 1959 1,900,000 1,957,000 55.2 50.4 104,880,000 98,610,000 .71 .66 74,646,800 65,564,300 Barley 1958 1959 91,000 100,000 45.0 40.7 4,095,000 4,068,200 .98 .97 4,013,100 3,930,700 Rye 1958 1959 92,000 73,000 25.6 21.7 2,355,000 1,582,800 .99 1.00 2,331,400 1,580,500 Flaxseed . 1958 1959 11,000 11,500 14.2 14.5 156,000 166,300 2.61 2.90 407,000 482,700 Mixed Grains 1958 1959 760,000 767,000 55.6 50.7 42,256,000 38,868,100 .82 .77 34,649,900 29,870,700 Buckwheat 1958 1959 27,000 25,000 23.2 22.3 626,000 557,600 1.02 .99 638,500 554,700 Corn for Husking (shelled) 1958 1959 487,000 480,000 60.8 64.1 29,610,000 30,756,500 1.21 1.04 35,828,100 31,860,700 Peas, dry 1958 1959 6,700 7,000 19.9 19.6 133,000 137,400 2.40 2.46 319,200 337.700 Beans (dry) 1958 1959 65,500 66,700 21.3 21.1 1,395,000 1,409,400 3.65 3.72 5,091,800 5,249,400 Soybeans . 1958 1959 256,000 248,000 25.7 27.4 6,579,000 6,783,100 1.88 1.84 12,368,500 12,482,300 Field Roots 1958 1959 15,000 12,700 469.0 464.0 7,035,000 5,898,100 .50 .50 3,517,500 2,963,700 Potatoes . 1958 1959 56,500 53,000 235.0 210.8 13,278,000 11,172,400 1.18 1.45 15,668,000 16,235,400 Fodder Corn 1958 1959 285,000 280,000 10.74 11.37 3,061,000 3,184,100 4.35 4.21 13,315,000 13,420,800 Hay 1958 1959 3,185,000 3,300,000 1.74 2.01 5,542,000 6,630,000 15.16 13.86 84,016,700 91,893,800 Sugar Beets 1958 1959 31,600 33,996 15.27 14.91 Lbs 482,600 507,000 Lbs 13.62 13.62 6,573,000 6,905,300 Tobacco 1958 1959 124,557 118,407 1,512 1,301 188,364,000 154,000,200 45.83 52.94 86,330,000 81,535,400 TOTAL 1958 7,988,857 411,041,300 1959 7,975,603 384,790,800 — 37 — TABLE "D" — continued ESTIMATED PRODUCTION AND VALUE OF SPECIFIED COMMERCIAL FRUITS AND VEGETABLES IN ONTARIO FOR THE YEAR 1959 FINAL ESTIMATE YEAR 1959 Farm Total Total Selling Value Total COMMODITV^ Acres Production Per Unit Farm Value $ c $ bu. bu. Apples 24,089 4,603,100 1.07 4,942,300 bu. bu. Cantaloupes 452 130,639 2.12 277,300 bu. bu. Cherries, Sour 3,844 240,850 3.48 814,600 bu. bu. Cherries, Sweet 1,757 176,400 5.57 982,100 ton ton Grapes 20,449 35,872 94.64 3,395,000 bu. bu. Peaches 13,855 2,143,300 2.08 4,454,800 bu. bu. Pears 6,485 766,700 1.65 1,263,200 bu. bu. Plums and Prunes 3,892 361,100 1.65 587,300 Raspberries 1,790 2,364,600 .374 883,600 Strawberries 4,283 6,188,i00 .227 1,408,600 lbs. lb. Asparagus 2,849 6,071,500 17.80 1,078,800 ton ton Beets 1,495 14,752 35.45 523,000 ton ton Cabbage 2,773 30,528 32.49 991,800 ton ton Carrots 3,871 49,589 35.39 1,754,800 doz. doz. Cauliflower 1,122 364,878 1.37 500,900 Celery 725 471,030 1.47 694,400 doz. doz. Lettuce (Head) 2,073 1,797,250 .835 1,502,100 bu. bu. Tomatoes (All) 32,833 10,995,200 1.283 13,847,200 ton ton Canning Peas 17,292 101.75 1,759,395 ton ton Canning Corn 70,095 26.08 1,828,391 — 38 — TABLE "E" TOBACCO INSURANCE AGENTS OF ONTARIO TOBACCO HAIL RATES 1960 AREA 10% Minimum 10% Deductible PER $100.00 COVERAGE Bayham Charlotteville Houghton North Walsingham South Walsingham Woodhouse $ 9.50 $ 8.00 Dereham North Norwich South Norwich Middleton Townsend Windham 12.00 9.50 Burford Brantford Dumfries Oakland County of Waterloo Blandford Blenheim Zorra Oxford (E. - W.) 14.00 11.00 Malahide Yarmouth S. Dorchester 12.00 9.50 Dunwich Aldboro Southwold Township of Zone County of Kent (excepting Twp. of Zone) 8.50 7.00 County of Lambton County of Durham County of Middlesex 12.00 11.00 County of Essex 7.50 6.00 County of Durham County of Northumberland 10.00 8.00 Townships in County of Simcoe: A — Adjala - Tecumseth 12.00 9.50 B — Essa - Tossorontio 10.00 8.00 C — Balance of County 7.50 6.00 County of Bruce 8.50 7.00 Balance of Province 7.50 6.00 — 39 — TABLE "F' TOBACCO INSURANCE AGENTS OF ONTARIO TOBACCO, FROST & WIND RATES, 1960 AREA Norfolk 10% minimum Elgin 10% minimum . Middlesex 10% minimum . Kent 10% minimum . Lambton 10% minimum . Essex 10% minimum . Durham 10% minimum . Oxford: South Norwich 10% minimum . Dereham 10% minimum . Blandford 10% deductible Blenheim 10% deductible Balance of County 10% deductible Brant - Burford 10% deductible Simcoe 10% deductible Bruce 10% deductible PER $100.00 COVERAGE $ 6.50 6.50 7.00 4.00 6.50 4.00 7.00 7.00 7.00 10.00 10.00 7.50 10.00 10.00 10.00 OTHER CROPS — HAIL RATES Corn full cover Wheat full cover Oats full cover Barley full cover Mixed Grains full cover Rye full cover Buckwheat full cover $2.00 2.00 2.00 2.00 2.00 2.00 4.25 Soya Beans fuU cover — 40 — Spelt fuUcover 4.25 Flax fuUcover 5.00 Peas full cover . 5.00 Beans fuUcover . 5.00 Turnips full cover 2.00 Sugar Beets fuUcover .. 2.00 Potatoes fuUcover 2.00 2.00 TABLE "G" CROP INSURANCE (FEDERAL) IN OHIO FOUR CROPS IN 1958 COVERAGE PER ACRE NATIONAL OHIO CROP Low High Low High Wheat $ 765 $ 41.13 $ 18.40 $ 33.30 Corn 12.00 44.00 31.00 40.00 Soybeans 12.00 33.00 22.00 28.00 Tobacco 140.00 505.00 324.00 362.00 Source: Federal Crop Insurance Corporation and Ohio Crop Insurance Corporation Actuarial Divisions. FEDERAL ALL RISK PREMIUM RATES PER $100.00 COVERAGE IN OHIO IN 1958, AND U.S.A. NATIONAL OHIO CROP Low High Low High Wheat $ 2.35 $ 37.10 $ 2.45 ( .75) $ 6.00 (1.62) Corn 3.00 17.60 3.80 (1.18) 7.20 (2.59) Soybeans 4.60 12.50 5.80 (1.28) 11.60 (3.02) Tobacco 1.85 12.75 5.20(16.85) 5.50(19.90) Source: Ohio Crop Insurance Corporation Actuarial Divisions (Ohio figure in parenthesis is per acre rate). — 41 — TABLE "H" FEDERAL CROP INSURANCE EXPERIENCE FOR THE 10-YEAR PERIOD 1948-57, INCLUSIVE U. S. A. Surplus or CROP Premiums Indemnities Deficit ( — ) 1. Exclusive of 14 "Dust Bowl" counties where insurance was discontinued. Wheat $ 102,306,066 $94,008,223 $ 8,297,843 Cotton 17,451,684 18,157,418 —705,734 Flax 7,517,809 5,815,376 1,702,433 Tobacco 16,888,516 11,856,584 5,031,932 Corn 13,505,637 16,881,703 —3,376,066 Beans 1,394,461 1,719,492 325,031 Multiple Crop 21,420,275 24,160,639 —2,740,364 Citrus 601,290 388,355 212,935 Soybeans 123,464 91,340 32,124 Barley 291,698 107,333 184,365 Peaches 37,400 22,000 15,400 Total $ 181,538,300 $ 173,208,463 $ 8,329,837 2. 14 "Dust Bowl" counties where insurance was discontinued. Wheat $ 7,414,766 $ 21,251,345 —$13,836,579 Multiple Crop 1,432,893 5,888,178 —4,455,285 Total 8,847,659 27,139,523 —18,291,864 GRAND TOTAL $ 190,385,959 $ 200,347,986 —$9,962,027 — 42 — TABLE "V CROP INSURANCE — RE HAIL — ONTARIO 1959 As Reported In Annual Report Of The Superintendent Of Insurance 1960 COMPANIES Net Premiums Written Agents General $ 32,254 American Insurance 49,449 Anglo Canada Fire & General 606,685 Canadian Reinsurance 753 Continental Insurance 11,640 Federation Insurance 138,122 Florists' Mutual 19,515 Gibraltar Insurance Co 108,171 Global Reinsurance 66,794 Great Lakes Reinsurance 6,599 Guarantee Co. of North America 106,907 Home Insurance 106,352 Lloyd's 44,929 New York Fire 8,508 Niagara Fire 59,869 North American Reinsurance 29,380 Phoenix of Hartford 76,931 Reliance Insurance of Canada 27,654 Simcoe & Erie Gen. Insurance Co. 15,725 Upper Canada Insurance 45,509 Connecticut Fire (unlicensed) 22,584 Equitable Fire & Marine (unlicensed) 4,517 Net Losses Incurred $ 18,489 44,965 458,108 456 672 81,172 1,248 69,670 49,304 4,253 78,802 70,633 8,902 53,557 17,769 74,491 26,777 90,748 33,031 21,868 4,374 Totals for 1959 $ 1,588,847 $ 1,209,289 Totals for 1958 1,698,333 482,967 Totals for 1957 1,454,760 1,863,642 Totals for 1956 1,335,357 1,535,817 Totals for 1955 1,092,504 237,468 TOTALS — 5 years $7,169,801 $5,329,183 — 43 — Ratio Net Losses Insured To Net Premiums Written 57.3 90.9 75.5 60.6 5.8 58.8 6.4 64.4 73.8 64.4 73.7 66.4 104.6 89.5 60.5 96.8 96.8 577.1 72.6 96.8 96.8 76.1 28.4 128.1 115.0 21.7 74.3 TABLE ''J" SUMMARY OF WEATHER LOSSES TO CROPS REPORTED BY 238 FARMERS IN DOVER AND CHATHAM TOWNSHIPS, JUNE 11th- 18th, 1960 fli o t; -4-> Winter Wheat 82 Barley 40 Oats 56 Soyabeans 85 White Beans 52 Grain Corn 167 Canning Corn 19 Sugar Beets 48 Canning Peas 23 Canning Tomatoes 25 Pumpkins 3 f crop [y seeded crop by who [ loss COMPLETE LOSS AND NOT RE-SF.KDED PARTIAL LOSS AND NOT RE-SEEDED 40% Loss and Over Acres o original! to this farmers suffered cow ll row 1,907 18 73 4,296 45 667 19,133 1,083 13 97 6,276 18 215 7,137 882 14 48 3,131 39 368 8,268 2,502 22 144 9,000 48 865 28,036 1,420 12 41 3,282 16 154 7,851 7,179 57 388 27,655 71 1,120 46,797 287 7 18 1,920 5 41 2,445 901 10 25 2,610 7 42 4,264 361 12 103 14,725 11 29 10,900 268 10 29 9,050 10 37 7,400 35 1 1 150 44 — TABLE "J" SUMMARY OF WEATHER LOSSES TO CROPS REPORTED BY 238 FARMERS IN DOVER AND CHATHAM TOWNSHIPS, JUNE 11th -18th, 1960 DAMAGED & RE-SEEDED TO PARTIAL LOSS AND NOT RE-SEEDED SAME OR ANOTHER CROP Less than 409'c Loss ANTICIPATED LOSS 40% and Over ANTICIPATED LOSS Less than 40% $«« J« ^ -a IS 1 1^ ll ^5 i 25 424 5,272 3 50 1,690 4 48 435 25,119 5,707 30,826 10 201 2,225 5 50 1,380 1 20 250 14,793 2,475 17,268 10 115 1,127 5 52 1,215 1 10 100 12,614 1,227 13,841 15 252 3,790 24 615 17,336 4 64 1462 54,372 5,252 59,624 7 89 3,167 13 180 8,700 19 400 7648 19,833 10,815 30,648 55 1469 25,966 26 491 23,075 10 213 3220 97,527 29,186 126,713 11 100 4,480 1 9 90 4,365 4,570 8,935 30 331 10,256 9 86 8,595 6 59 1290 15,469 11,546 27,015 4 149 2,460 2 30 2,190 1 14 200 27,815 2,660 30,475 8 44 4,015 2 22 6,500 3 17 847 22,950 4,862 27,812 3 34 1,170 150 1,170 1,320 $295,007 $79,470 $374,477 Loss on Crops not listed on schedules: Popcorn $350; Tobacco $4,750; Hay $1,930; Red Beets $2,500; Cucumbers $670; Strawberries $60 $ 10,260 $ 384,737 No. of Farms — 238 Average Loss Per Farm — $1,616.54 45 TABLE "K'* B.C. F.G. MUTUAL HAIL INSURANCE CO. PREMIUMS AND LOSSES Year Risk 1950 $ 600,571. 1951 526,829. 1952 1,427,094. 1953 3,290,010. 1954 4,376,158. 1955 5,859,666. 1956 3,885,307. 1957 4,902,380. 1958 4,730,296. 1959 3,436,522. 1960 3,752,230. Premium Claims 32,610. $ 16,973. 25,954. 2,903. 70,460. 17,218. 115,126. 181,179. 149,764. 64,458 191,288. 188,581 126,175. 68,372 159,272. 57,084 154,319. 115,533 125,522. 51,663 147,468. 18,412 46 — TABLE "L" B. C. F. G. MUTUAL HAIL INSURANCE COMPANY BALANCE SHEET As Of December 31st, 1959 ASSETS CURRENT: Cash on hand and in bank (after providing for outstanding cheques) $ 15,148.48 Accounts receivable 653.25 Accrued interest on investments 335.09 $ 16,136.82 INVESTMENTS: (at cost, par value $75,025.00) On deposit with Minister of Finance 4,950.00 Other 68,644.45 73,594.45 $ 89,731.27 LIABILITIES CAPITAL AND RESERVE: Capital: Authorized 5,000 shares of guaranteed stock with a par value of $10.00 each $ 50,000.00 Issued and fully paid for: 1,870 shares of $10.00 each 18,700.00 General Reserve: Balance as at Dec. 31st, 1958 $ 50,026.75 Add: Transferred from net profit for the year ended Dec. 31st, 1959 (Statement "B") 21,004.52 71,031.27 Statement "A" $ 89,731.27 $ 89,731.27 — 47 — TABLE "M" B. C. F.G. MUTUAL HAIL INSURANCE COMPANY REVENUE AND EXPENDITURE STATEMENT FOR THE YEAR ENDED DEC. 31st, 1959 REVENUE Premiums earned $125,521.64 Investment Income 1,466.00 $126,987.64 EXPENDITURES: Claims $ 51,663.03 Reinsurance premiums 12,500.00 Adjusting expense — Fruit Growers Mutual Insurance Company $5,036.84 — Other 43.75 5,080.59 Bad Debts 384.97 Operating fee charged by Fruit Growers' Mutual Insurance Co. per contract 18,828.25 88,456.84 NET PROFIT FOR THE YEAR ENDED DECEMBER 31st, 1959 $ 38,530.80 ALLOCATION OF PROFIT: General Reserve $ 21,004.52 Paid to members as refund (15.51% of 1959 eligible premiums) 17,526.28 STATEMENT "B" $ 38,530.80 — 48 — i. i ) : h i s.'